At the University of California, Merced, one right of passage -- college students crammed into shoebox-sized dorm rooms -- is no longer.

For thousands of collegians, the life of the starving student has been traded in for the lap of luxury. Many of now living in sprawling new homes which were abandoned by foreclosures in one of the hardest-hit cities in the U.S.

These so-called "McMansions" are complete with spiral staircases, sparkling chandeliers and even Jacuzzis.

Third-year student Stephen Chang and five other engineering buddies live in a 3,300-square-foot house that has five bedrooms, four full bathrooms, a gas fireplace and a two-car garage. In the kitchen, there are granite countertops, a walk-in pantry and a stainless-steel sink and dishwasher. The dining room now serves as the ping pong room and a place to store bikes. Chang even has his own bathroom.

They pay about $300 a piece a month -- about half as much as they paid to live in the school's dorms.

"It's way better than being in the dorms," Chang said.

"It doesn't really compare," said third-year student Jeff Laird. "I have a few freshman friends on campus who I've brought over and they are just in awe when they first walk in and are determined to move off campus as soon as they can."

So many students have moved to these giant suburban homes that the university has shuttle buses to transport them to and from classes. Chang and Laird said that several other college students lived on their street and that the neighborhood was mostly made up of students.

"I guess it's kind of sad to see all these students living in such nice houses, when there could be families living there," Chang said, "[but] we are bringing income to this area, so better us rent these houses than have them just sit here and nobody rents them at all."

It's a win for the young university, which only has enough campus housing for about a third of its nearly 5,200 students.

"It's not a win for the people who lost their homes but it's a win for our students and for the campus that our undergraduate and graduate students have some really lovely places to live in," said Jane Lawrence, the university's vice chancellor for student affairs.

Some students' parents are swooping in and buying the homes as investment properties and the banks that are sitting on these vacant sites are benefitting. Even the neighbors don't seem to mind.

"They get in there and they're paying the rent and they're taking care of business," Michael Abarca said. "They are pretty quiet on the block."

Ellie Wooten, a real estate broker and the former mayor of Merced, said the university had greatly helped a community crippled by the foreclosure crisis.

"When you have students in there [homes], you don't have vandalism and people breaking in and that sort of thing," Wooten said. "There is a background check on their parents so the parents know they are responsible for their son or daughter living in this house. ... Businesses at large are doing a lot better because of the students."

Some of the students say they've actually taken a step up from the life they left with their parents.

"I have a twin bed at home in a smaller room than this," Chang said. "I kind of don't even want to go home sometimes because my house here is nicer."